Oil Theft in Nigeria: The Politics and Economics Behind It

The atrocious oil theft in Nigeria has made local and global headlines in recent months. In October 2022 alone, two illegal pipelines were discovered to siphon the country\’s crude oil from the Forcados Terminal to the 48-inch Trans Forcados Export Trunk line. Such discovery has become common since the Nigerian National Petroleum Company Limited (NNPC) awarded a ₦48 billion-a-year pipeline protection contract to Tantita Security Services Nigeria Limited, which is owned by Mr Government Ekpemupolo, alias, Tompolo. The scale and sophistication of oil theft in Nigeria are telling such that oil revenues have dwindled astronomically. In 2022, the government will collect just $2.9 billion in oil proceeds, compared to nearly $60 billion in 2011.

Between January and July 2022, Nigeria, Africa\’s biggest oil producer, lost an average of 437,000 barrels of oil daily to criminals. Also, Nigeria’s crude oil production has crashed by 24.73 per cent in September 2022 to 937,766 barrels per day, compared to 1.246 million barrels per day recorded over the corresponding month in 2021. This and other issues, such as persistent fuel scarcity, exorbitant prices, and the opaque oil subsidy, have led to agitation for the NNPC to be unbundled or privatised outright.

This edition of Nextier SPD Policy Weekly examines the politics and economics of oil theft in Nigeria and highlights how the enormous economic sabotage can be addressed.

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